page top

Blog articles and News

Home / Latest blog posts from SWSCU

Blog articles

Make your retirement funds go the distance

Attention: open in a new window. Print

Written by Tahlia Johnson

You only get one shot at going into retirement, so it is essential that you go in with your eyes wide open. That means being aware of where your income may be coming from, how to plan for living and recreational expenses, and making decisions that are balanced and have an eye on the long term.

 

The earlier you start preparing, the more options you will have, so here are some top tips to get the ball rolling.

 

Where do you stand now?
Even if you haven’t been especially concerned about financial planning throughout your working life, it is important to do so as you enter retirement, when you are no longer able to rely on earned income.

The first part of the planning process is to get a clear understanding of where you currently stand financially. What assets do you have and what are they worth? This includes your home, your savings and investments accounts, your superannuation, and your possessions.

 

Key dates to be aware of
The next step is to establish the key milestones as you transition to retirement. The first milestone is your ‘preservation age‘ — the age at which you can access your super. Provided you have retired from the workforce, the minimum preservation age is 55 years if you were born before July 1960. This age increases on a sliding scale up to age 60 for those born after June 1964.

The second milestone is the age at which you are eligible for the age pension. For those born before July 1952, this will be 65. For those younger than that, it can be as high as age 67, depending on your date of birth. Eligibility also depends on the income and assets tests.

Plan around your lifestyle decisions
Once you know when your super and pension income will kick in, you can start to plan your finances around the lifestyle activities you want to engage in during the potentially long years of retirement ahead. For example, you may want to:

  • Travel in the earlier stages of retirement, before settling down
  • Make some renovations around the home in the earlier years, so you don’t have to worry about them later
  • Make major recreational purchases, such as a boat or motorhome
  • Downsize your home or move to a retirement village down the track

Ideally, all of these major lifestyle decisions should be projected early, so that you can allocate funds for them, decide where those funds should be drawn from, and ensure that you have enough left to generate an ongoing income.

 

Assess your income options
Get a clear picture of where your retirement income may come from. This could include:

  • Income from super
  • Investments outside super
  • Part-time employment
  • The age pension
  • Home equity release or selling the family home

In assessing these income sources, you need to consider whether one may impact another. For example, selling the family home or working part-time may impact your age pension.

 

Take full advantage of entitlements
While the age pension on its own may not be enough to fund the lifestyle you want to enjoy, it can certainly be a handy supplement to your ongoing living income. Apart from the pension itself, there may also be other benefits, such as travel concessions, cheaper medicines, and reduced council and water rates, which can translate into a significant amount of savings every year.

Structuring your investments to maximise entitlements is therefore a critical issue and some professional financial advice can make a big difference.

 

Is work an option?
Not everyone is particularly keen on making a sudden shift from full-time work to full-time leisure, so if you are still interested in continuing to work part-time, it can help you delay drawing down on your super and other assets.

There are incentives within the social security system to encourage this, so seek advice to see how it may be a good option for you financially.

Budgeting is essential
There may be a temptation to splurge a little when you first receive a large lump sum from your super, but make sure you project your living expenses properly before taking the plunge.

More than ever, a simple budget is essential to ensure you don’t outlive your income in retirement, so ask for advice and get things in writing to make it as tangible as possible.

 

Don’t forget to include emergency funds in your budget to take care of any surprises or spikes in expenses, such as unexpected illness, a house move, or a family crisis.

 

Get advice early 
As you can see from the factors mentioned here, there are many interconnected elements to planning income and expenses for retirement. Speak to a Bridges financial planner to help put the puzzle together, structure a diversified investment strategy, maximise entitlements, and map out your lifestyle and living expense needs.

 

Take the next step

To discuss your financial situation, make an appointment with a Bridges financial planner. We have an established alliance with Bridges, to provide our customers with financial advice. Bridges has been helping Australians with financial advice for 30 years. A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances to help you achieve your goals. To make an appointment with a Bridges financial planner, call 02 6384 1111. The initial consultation is complimentary and obligation free.

 

Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.

This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.

Examples are illustrative only and are subject to the assumptions and qualifications disclosed.

Part of the IOOF group


Read/Post Comments (0)
 

Australians urged to be scam smart

Attention: open in a new window. Print

Written by Tahlia Johnson

Australia’s customer owned banking institutions are urging Australians to be scam smart as scammers ramp up activity in Australia.
Figures from the Australian Competition and Consumer Commission reveal the extent of the criminal activity, with a more than 900 per
cent increase in scam activity where criminals pretending to be from the Australian Tax Office.
To help combat the rise in scam activity, the Customer Owned Banking Association has prepared five tips for consumers to avoid
fraudsters.
1. Don’t assume that an Australian phone number means the call is legitimate. Offshore scammers use programs to change
their international number to look like a local one to convince people the call is legitimate.
2. Don’t become panicked or flustered. These scams rely on people worrying that they will be charged a fee or lose access to a
service if they don’t hand over information or money.
3. Question whether the organisation they claim to represent would actually call and threaten you. Government
departments, utility providers and law enforcement all follow due process. Phone calls that carry threats of hefty fines or
imprisonment or ask you for immediate payment in Gift Cards or sending money overseas are not genuine.
4. Never give a stranger remote access to your devices. Scammers claiming to be from utility providers will often ask you to allow
them access to your computer or device. This gives them access to all your private information and your financial details.
5. Hang up the phone. As soon as you suspect it’s a scammer on the line- hang up the phone.
The Customer Owned Banking Association’s Director of Services and Financial Crimes, Leanne Vale, said vigilance was crucial to thwart
scammers from taking your details.
“Scammers prey on people’s fear and panic. They try to convince you that you’ll either be cut off from a service like the internet or
rounded up in a paddy wagon for failing to pay an imaginary fine.
“Sadly, the people who are most vulnerable to these scammers are the elderly.
“Older Australians should feel comfortable questioning any unsolicited phone calls. If you don’t know the caller and feel they are asking
for personal information, just hang up straight away. Be sceptical these fraudsters are convincing and can also be abusive.
“You wouldn’t let a stranger into your house, or your car so don’t let strangers on the phone access your device. You’ve worked hard all
your life for your savings don’t give it to these heartless thieves.
“By being scam aware Australians can save themselves from a lot of heartache and stress.
“If in doubt, hang up the phone and visit www.scamwatch.org.au for more information.”

Read/Post Comments (0)
 

How to set realistic financial goals

Attention: open in a new window. Print

Written by Tahlia Johnson

For some of us, setting financial goals may seem like an overwhelming chore that quickly ends up in the “too hard” basket.

The key to overcoming this problem is to break things into a few simple steps that will get you off the ground and set you on a steady path toward financial freedom.

Create a vision
The best way to start setting realistic financial goals is to determine what will motivate you. What are your dreams for your ideal lifestyle? What will you own? Where do you want to live? What car will you drive? What will you enjoy doing?

Whether your answers to these questions are humble or huge, the important thing is to make them as specific as possible so you can visualise yourself enjoying them.

Build positivity with quick wins
While the first step is to think long-term about your big dreams, it is important to get some smaller goals under your belt. This might be aiming to go hard on paying off your credit card balances, or to start regularly depositing a modest amount in a savings account that is earmarked purely for future investment purposes.

Reality check your spending
Many people fail to get their financial goals off the ground because they think they can rely on willpower alone to change spending habits, rather than using hard evidence about what they spend on and where changes can be made. Just one hour with your bank statements for the last 12 months will allow you to get a handle on exactly where your money is going.

You may be surprised to find a much higher proportion of your income going toward discretionary spending than you first thought, such as eating out or impulsive purchases. This exercise allows you to quickly determine which areas can be cut back on, so that you can identify funds that can be redirected toward financial growth objectives.

Save before you spend
Another quick and effective budgeting technique that can generate momentum is to follow the rule of “paying yourself first”. This simply means that the first thing you take out of your regular pay cheque is a set amount to put toward saving and investment plans before you start spending on anything else. By prioritising this one simple action, you are taking a significant step and forming an invaluable habit that will start growing your wealth, without any tedious record keeping.

Of course, more detailed budgeting should be the ideal you are aiming for, but if you wince at the thought of crunching numbers, this step will at least get you started, and deliver a sense of progress and control.

Set staged and realistic goals
Once you have taken the above small steps, you can start to make more adventurous plans for the medium to long-term. This can involve bigger-ticket financial objectives that will make a real difference to your wealth creation, such as paying down your mortgage faster, setting targets on your superannuation nest egg, or building a diverse investment portfolio.

Ask the experts
One phone call could be the start of some profound and exciting changes in your goal-setting journey. Engaging the help of a financial planner can open up a whole range of opportunities and resources that can benefit your financial growth. This includes a structured approach to examining your lifestyle priorities and investment preferences, so you can map out a more comprehensive plan targeting a variety of goals and take the worry out of making investment decisions. You can lean on their research capabilities to create a durable ongoing plan that will help you reach your goals more effectively.

Take the next step to discuss your financial situation, make an appointment with a Bridges financial planner. We have an established alliance with Bridges, to provide our customers with financial advice. Bridges has been helping Australians with financial advice for 30 years. A Bridges financial planner will develop a plan specifically for you; one that’s tailored to your needs and circumstances to help you achieve your goals. To make an appointment with a Bridges financial planner, call 02 6384 1111. The initial consultation is complimentary and obligation free.

Bridges Financial Services Pty Ltd (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837.

This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making an investment decision based on this information, you should assess your own circumstances or consult a financial planner or a registered tax agent.

Examples are illustrative only and are subject to the assumptions and qualifications disclosed.

Part of the IOOF group

In referring customers to Bridges, South West Slopes Credit Union Ltd does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.


Read/Post Comments (0)
   

What's new in super and tax this financial year?

Attention: open in a new window. Print

Written by Tahlia Johnson

The 2019/2020 financial year introduces some new opportunities to allow you to save for your retirement through super. Below Bridges also provide an overview of the ‘protecting your super’ legislation and personal income tax changes.

Superannuation

Claiming a deduction on personal super contributions

Since 1 July 2017, employees as well as the self-employed, can claim a tax deduction on personal super contributions.

If you are aged between 65 and 74 you can make a contribution to super but you need to meet a work test. To pass the work test, you need to have been ‘gainfully employed’1 for at least 40 hours over 30 consecutive days during the financial year in which you plan to make the contribution. That’s a little over one week’s worth of full-time work in a single month.

Also, if you’re aged between 65 and 74 and have a ‘total super balance’2 under $300,000, you can make personal contributions to super in the first financial year in which you no longer meet the work test. This is likely to be the first year following your retirement.

Unfortunately, if you are 75 or over you are not eligible to make a personal contribution to super.

Generally, the cap on concessional contributions is $25,000 each financial year.

What if you didn’t contribute last financial year – do you miss out?

For the first time this financial year, if you have a total super balance of under $500,000, you can contribute the unused portion of your concessional contributions cap, or ‘carry-forward’ amount, from last financial year. That is, if you didn’t contribute in the 2018/19 financial year, you may be able to carry forward $25,000 to this financial year and contribute up to $50,000.

Currently, only the unused concessional contribution cap amounts in the 2018/19 financial year can be carried forward. Then, for future financial years, the unused concessional contribution cap amounts can be carried forward, on a rolling basis, for five years.

So, if you’ve accrued a carry-forward concessional contribution amount, you may want to start, or increase your salary sacrifice contributions, or make a personal concessional contribution to super. This can be particularly beneficial for your tax bill if you’ve significantly increased your income, for example, if you’ve sold an asset with a large capital gain.

Protecting Your Super legislation

The ‘Protecting Your Super’ legislation came into effect on 1 July 2019 and is designed to protect people’s super balances. The three main changes are:

Insurance in super – if you have an inactive super account, defined as an account where you have made no contributions in the last 16 months, your insurance will be cancelled unless you take action. You can retain your insurance by contacting your super fund and ‘opting-in’ to retain your insurance or having a contribution made into your account every 16 months.

Low super balances – if your super account balance is under $6,000 there is a cap placed on fees, limiting them to no more than 3% per year. Also, if you have an ‘inactive low balance’ account, the Australian Taxation Office (ATO) is now responsible, where possible, for consolidating this money with your active super account. An inactive low balance account is broadly defined as an account with a balance of under $6,000 where no activity has occurred in the last 16 months. This includes where no contributions have been made to the account in the last 16 months and where there is no active insurance on the account. Other new definitions apply.

Exit fees – when you exit a super fund you will no longer be charged an exit fee.

Personal income tax rates

Australians can continue to enjoy the first round of personal income tax changes that started in July 2018.

From 1 July 2022, the Government will increase the 32.5% tax threshold from $90,000 to $120,000. This means there will be less people in the 37% tax bracket and more in the 32.5% tax bracket. On 1 July 2024, the 37% tax bracket will eventually disappear and the 32.5% tax bracket will reduce to 30%. It’s estimated that 94% of personal taxpayers will have a marginal tax rate of 30% or less in the 2024/25 financial year.

Tax offsets

In addition to the changes to income tax, the Government has introduced a temporary tax offset called the low and middle income tax offset (LMITO), of up to a maximum of $1,080 per person and phases out for those earning over $126,000 per annum.

This is in addition to the low income tax offset (LITO) for those earning under $66,666 per annum.

The LMITO offsets will end after the 2021/22 financial year. However, from 1 July 2022, the Government will increase the (LITO), from $445 to $700 to continue to support low income earners.

You don’t need to do anything to receive the tax offsets, the ATO will assess your eligibility when you complete your personal tax return.

Future changes to tax rates and thresholds

Tax rate Current threshold Threshold from 1 July 2022 Threshold from 1 July 2024
Nil 0 - $18,200 0 - $18,200 0 - $18,200
19% $18,201 - $37,000 $18,201 - $45,000 $18,201 - $45,000
32.5%
(current and from 1 July 2022) 30% from 1 July 2024
$37,001 - $90,000 $45,001 - $120,000 $45,001 - $200,000
37% $90,001 - $180,000 $120,001 - $180,000 -
45% $180,000+ $180,000+ $200,000+
LMITO (max) $1,080 - -
LITO (max) $445 $700 $700

 

1 The ATO defines gainful employment as employed or self-employed for gain or reward in any business, trade, profession, vocation, calling, occupation or employment.
2 Your ‘total super balance’ is measured on 30 June of the previous financial year and is calculated by adding several items together including both accumulation and pension interests of your super.

 

Bridges Financial Services Pty Limited (Bridges). ABN 60 003 474 977. ASX Participant. AFSL 240837. Bridges is part of the IOOF group. This is general advice only and has been prepared without taking into account your particular objectives, financial situation and needs. Before making a decision based on this information, you should assess your own circumstances or consult a financial planner or seek tacation advise from a registered tax agent.

In referring customers to Bridges, South West Slopes Credit Union Ltd. does not accept responsibility for any acts, omissions or advice of Bridges and its authorised representatives.

 


Read/Post Comments (0)
 

Super Dependants

Attention: open in a new window. Print

Written by Tahlia Johnson

If you have a superannuation fund, you’ve probably been asked to nominate your beneficiary. But, super fund trustees can only pay your super death benefit to eligible dependants or to the legal personal representative of your estate. Bridges, our financial planning partner, explains what you and your family need to know.


Read/Post Comments (0)
   

Page 2 of 3

 

 

 

Go local with SWSCU

 

 

 

 

 

 

Multi Currency Cash Passport

 

Learn More

 

 

 

 

 

 

Learn More